Saturday, January 07, 2012

The Ministers have accepted a 36% cut in their salaries. The cut was higher than what most Singaporeans had expected, based on the survey carried out by me earlier. 76% had expected no cut or a cut of less than 25%. The results of the survey can be found here.

We have to acknowledge that the Government had taken an important first step to address the concerns of the people and that the review committee had done a good job in drawing a fine balance between the difficult conflicting requirements. While the revised salaries are still high by international standards, they are not high by Singapore standards, where chief executives, lawyers and doctors are earning much more.

Our challenge is to reduce the cost of living for the ordinary citizens. Let us focus on this important task, and do not be too distracted by the salaries of our political leaders. Let us give them the support to address the key challenge.

I read that Nokia has decided to move its Asian headquarters from Singapore to Beijing, citing high operating cost and other reasons. Google choose Kuala Lumpur to be their regional base, instead of Singapore.

A friend, who was in charge of planning for a large multi-national company with wafer fab operations in various countries in Asia told me that it is too costly to manufacture in Singapore. He said that a factory in Singapore that requires spare parts pay 2 to 3 times of the price that a Taiwan factory pays to their local suppliers. Someone, the Singapore suppliers charge too much, even for spare parts that are imported from overseas.

A few people have told me that they can buy electronic products from Hong Kong at a price 20% lower than Singapore.

These are all signs of Singapore becoming too costly for business. I hope that our Ministry of Trade and Industry and Ministry of Finance are aware of these indicators. They are quite worrying.

The review committee under Gerard Ee has recommended that the salary of the President of Singapore be cut by 51% and the revised salary is about $1.5 million.

Several readers of my blog have commented that this cut matches the 50% that I promised to donate to charity during the campaign for the Presidential election. I wish to make this clarification.

I had expected the salary to be cut by 50% and my promise to donate 50% is on the reduced salary. This meant that I would be happy with a net salary of around $750,000 (which is still a lot of money). There is still the bonus that will be added to bring it up closer to $1 million.

Friday, January 06, 2012

For over two decades, Myanmar was considered to be an undemocratic country ruled by a dictatorial and corrupt military junta. The popular democratic leader, Aung San Suu Kyi, was placed under house arrest. Myanmar was shunned by the neighbouring countries and the democratic world.

During this time, the leader of Myanmar was Senior General Than Shwe, who was the supreme commander of the armed forces.

The political situation changed significantly in Myanmar since March 2011, when President Thein Sein came into power. My friend from Myanmar told me that many people were surprised that he implemented reforms and introduced democracy. Aung San Suu Kyi is now allowed to contest the next election. Furthermore, President Thein Sein and several members of his cabinet was regarded by the people to be free of corruption, and genuinely concerned about taking positive steps to improve the lives of the people.

What was more surprising, and is now being felt and realized by many people in Myanmar, was that the steps towards reform and democratic changes were planned by the former leader, Than Shwe. When he was in power, many people feared and perhaps hated him. It seemed that he might have a good leader after all.

Than Shwe supported Thein Sein's election as the President of Myanmar. In turn, Thein Sein has now earned the respect of the people of Myanmar and the democratic world through the positive leadership that he has provided.

This is the view of an insider of Myanmar. It development was a surprise to me, as I had not been following Myanmar closely. I wonder if other people, who knows the situation in Myanmar, can share their perspective?

FROM WIKIPEDIA
Senior General Than Shwe (born 3 February 1933) is a Burmese military leader and politician who was chairman of the State Peace and Development Council (SPDC) from 1992 to 2011. During the period, he held key positions of power including commander-in-chief of the Myanmar Armed Forces and head of Union Solidarity and Development Association. In 2011, he officially resigned from his position as head of state, in favor of his hand-picked successor, Thein Sein.

Thein Sein (born 20 April 1945) is a Burmese politician and former military figure who has been president of Myanmar (Burma) since March 2011. Previously, he was Prime Minister from 2007 until 2011. He is generally considered to be a moderate and reformist in the new government.

The final recommended salaries are quite close to my submission to the review committee at the start of the review. See this link. Sadly, as is the culture in Singapore, I will not get any credit for my humble suggestion.

I bought a case for iPad2 for $80 (including protective screen). Someone said that a similar cover cost about Amazon.com. I check and found that, if the mailing cost is included, the total cost would amount to $80. However, if 3 people were to buy at the same time, the cost would reduce to $60 as the high mailing cost would be shared. The problem is arranging the logistics for this service.

If there is a website to bring people together to buy collectively (say 3 or more pieces) of any product, it may be worth the trouble. One of the buyer could be the coordinator to contact and deal with the other people. They have to sort out the payment and collection arrangement, as the item would be delivered to one person. This arrangement has to work on trust, i.e. that the other buyers will pay for their share of the product when it is received.

Do you think that this type of arrangement can work, perhaps for items where the saving is worth the trouble? Perhaps, some students may wish to earn some money by providing this service for a fee? What are your views?

Quote:Singaporeans are always leery about such schemes implemented in Malaysia. Quality of care, for example, is an issue. However, for the many seniors whose ailments are common like high blood pressure, gout, arthritis, the access to free medication will relieve their financial burden. The PAP govt still makes the sick pay GST. They also collect GST on the amount you pay for medical insurance[Link]. The Singapore govt expenditure on health care is the lowest among developed countries as a percentage of GDP. This is done not achieved by being cost-effectiveness or efficient but by passing the rising cost of medical care to the sick and their family members. Not having a universal health care system in which everyone is covered and can go to hospital for treatment without family members having sleepless nights worrying about medical bills amplifies the effects of income inequality in a society with the largest income gap among developed countries. Unquote

I wish to give a different angle to the points raised by Jimmy Koh ("Don't give in to pressure against new insurance test", ST 27 Dec).

Mr. Koh argued that the new test is necessary "to equip insurance gents ... to advice their clients properly and fairly on ... investment linked policies". I am afraid that, like the proverbial dog, the advocates of this approach are "barking up the wrong tree".

Most investment-linked policies have high charges that take away more than 40% of the accumulated savings from the consumers. Although this is disclosed in the benefit illustration, how many consumers know about it? How many insurance agents point this out to the consumer? Even if the consumer asks about the high charges, also known as "the effect of deduction", some dishonest agents might explain that this is the cost of the life insurance protection - when the true cost is only a small fraction of the total deduction.

The truth is that a large part of the deduction goes to pay for the commission to the agent, the over-riding commission to the agency managers, high marketing expenses including the sales contests and incentive trips and the profit margin of the insurance company.

It it difficult for the insurance agent to give proper advice when they face this kind of conflict of interest. Do they look after the interest of the client and forego the attractive commission? I am afraid that this type of ethical issues cannot be answered through a written test.

After trying to deal with a similar issue for a few decades, the regulatory authorities in the UK and Australia have concluded that the only way to avoid the abuse caused by the conflict of interest is to ban the payment of commission for the sale of life insurance type of investment products. I hope that the Monetary Authority of Singapore will implement a similar approach, to safeguard the financial future of consumers.

Tuesday, January 03, 2012

Hi Mr Tan,I read this report with concern, is this going to get worse?http://www.channelnewsasia.com/stories/singaporelocalnews/view/1174482/1/.html
Many Sporeans tend to complain and complain yet they are mostly nothing but complain without action. They talk alot about voting for opposition, but many still vote for the PAP. They said one thing but when challenged or questioned in the open, they tend to avoid reality and become inaction.
Sporean parents are pressurising themselves and their children for various reasons. Majority do not want their children to be left out and so tuition and enrichment become part and parcel of the education/curriculum. There is no turning back and our next generation are going into the race without even knowing what is appropriate for them in future. They will only continue to compete and compete and unsure if they are competing for the right path in life! Very sad indeed, it is more than a pressure cooker.
In the article it reported that "......an Ang Mo Kio GRC MP Intan Mokhtar, who also lectures at the National Institute of Education (NIE), added that these enrichment centres play on parents' fears that their children would lose out if they are not stretched from a young age......"
In the first place, is our education system meant to stretch children from a young age? If so, then who is to blame who? OMG, very pathetic yet confusing. I do feel for these children but not the parents! When these kids grow up in future, they will likely adopt and impose the same practices and demands (as hope) on their kids instead..... onto the next generation....on and on, there is no turning back, perhaps until some drastic changes take place in this little island.

Do you realize how much trouble is taken to make a payment by check? You have to write the words and amount, the name of payee, the date and cross the check. You should also have a covering letter or write the details of the payment at the back of the check. You should also write the address of the payee on the envelope, put a stamp and mail the check.

If you factor the cost of the time taken by the admin staff to handle the payment, it could easily amount to $5 to $10. The party that receives the cheque also has to do a lot of work to clear the check. If they are automated, the cost may be lower, but still quite significant.

You should not make any small mistake as the bank will happily bounced your check, and you have to incur the cost all over again. The bank may even impose a hefty penalty on you for the rejected check. See the photo before for the work that is required to pay the check and to make sure that there is no mistake.

It is inefficient and costly for small businesses to make and receive payments by checks - but they do not have any alternative! I have urged our banks in Singapore to introduce an electronic payment system which includes a notification service.

My letter on this matter was published in Today newspaper and reprinted in this blog. I have also written to two banks, to the IDA and the Association of Banks on this matter. I hope that more people will come forward to express their support.

As the use of Internet is an important part of our life, it is important for the law makers in Singapore (i.e. our Parliament) to pass the law to make it clear that hacking and identity theft are crime, punishable as a crime according to the laws of Singapore. It should also be made clear that the Police will take complaints and the necessary steps to investigate the complaints. This important issue cannot be left vague. This is the job of Parliament!

Monday, January 02, 2012

A Singapore composer offered to create some music clips for my mobile apps. She quote a price of $750 for the music clips for one app (and it is restricted to only that app), and said that it will be for my exclusive use. This was too costly for me - and I do not need exclusive rights - but she was not prepared to reduce the price.

Later, I found a source in the Internet where I could get the suitable music clip for $10 and it is not restricted to one app. I need to pay a total of $50 for several music clips to be used for all of my apps. I decided to use the music clips from this source.

I introduced the Internet website to the music composer, so that she can upload her music clips and sell them at a lower price on a non-exclusive basis to the world market. I hope that she can make a business by offering a competitive price to her customers.

Note: Our businesses are now used to charging exorbitant prices that they are out of touch with the world market! I do not blame these businesses, because they have to incur high operating costs in Singapore, but this type of business model is bad for Singapore.

If you wish to have practical training on Android and iPhone platforms, you can send an e-mail to inbox@tankinlian.com.

You are required to have attended a course or have read and understood a book on the platform. Your training will be at any time during 10 am to 6 pm on Mondays to Saturdays. A PC and working desk will be available for your use. You will be given a project to modify and will have access to an experienced developer.

On completion of your training, you will have the chance to work on projects and earn an additional income.

ADDITIONAL NOTEPlease provide information on the following:1. Your name, email address, telephone, age and occupation2. Have you attended any course or read any book in Android or iPhone platforms?3. Do you have any experience or knowledge of Java, C++ or other platforms?
I expect the trainee to have some prior knowledge of the Android or iPhone platform, as I will be providing the practical training (and not the basic training on these platforms).

My Singaporean friend who travels to Hong Kong regularly in his regional marketing job, told me that he has stopped buying electrical products in Singapore as he could get them at least 20% cheaper in Hong Kong including controlled products like iPad and iPhone. I asked him to send me specific examples about the difference in prices.

His observation has confirmed my gut feel that Singapore has become very expensive in recent years due to high property prices, high rentals, GST, and high operating cost and inefficiency.

A few months ago, I wanted to buy a device to run my PowerPoint presentation remotely on my laptop. The shop in Thomson Plaza offered me the device for $120. I refused to pay this high price. Later, I found a good quality alternative (not the same brand) for less than $20 (including mailing) through the Internet.

Here are the unwanted mail that I received in my physical mailbox for the past two weeks, including the following:

Over 1 dozen invitation to property launches

Marketing flyers for various types of products

Magazines for my family members (and they do not read them)

Annual reports of companies (can be made available in a website)

I do not know how to stop the wanton waste. It would be nice to have a government sponsored website where the public can register their request to stop the unwanted mail. Let us do our part to save the environment. I hope that the IDA will take up this suggestion.

Sunday, January 01, 2012

Should we have more regulations or less regulations? It is not a matter of quantity but of quality. We need more of the necessary regulations and less of the unnecessary regulations. We need more regulation to stop people from cheating other people, but we need less regulation that make life difficult for people, without achieving any purpose. The trouble is ... our leaders do not know the difference! Do you agree?

I agree with all of his views, as they are quite close to my own views. Lucky Tan also said that there is a need to raise productivity in Singapore, rather than depend on cheap imported labor. I wish to give my own perspective on this issue, based on my past three years experience in running a small company in Singapore.

Our government agencies have added unnecessary costs to businesses from their impractical measures. Their websites are complicated and their online processes are painful to use. By trying to save a few minutes of their staff's time, they add several hours to the time of the public. We still make a lot of payments using physical checks and send a lot of mails and notification using physical mail. We are quite backward in these areas, compared to many first world countries. These inefficiencies increase the cost of running a business in Singapore!

Singapore has a lot of challenges ahead. They cannot be solved if our leaders continue to act in the old ways. Only best hope is that the leaders realize the extent of the problem and are prepared to face them.

I received a desperate plea for help from an widow who lost a lot of money on failed investments made on the advice of the relationship manager of a bank. The victim was advised to invest in dual currency and other linked products on the assurance that they were "safe". The bad advice was given in spite of her constant reminder to the relationship manager that she did not want to take risk!

I gave this reply to her.

I have come across many cases that are similar to yours. It is indeed very sad that our Government allowed this type of environment to continue for so long and does not step in to check the abuse.
The only way for a victim to get justice is to take the case to court. Here the odds are overwhelming. It is costly to fight against the big legal firms engaged by the bank. Furthermore, the court tend to apply the law rigidly and hold the victim responsible for signing away their rights in the forms that were given to them by the bank.
Another avenue is to write to the newspaper, but many victims prefer to be anonymous.
Due to these reasons, these cases are not publicized and more people fall into the trap over the years .
Are you willing to consider what needs to be done, i.e. to take the case to court or to write to the newspaper?

I wish to write this word of advice to all readers of my blog. Do not invest in complex financial products, especially those that are being sold to you by financial advisers or relationship managers. Many of these advisers might be ignorant of the risks of these products themselves, so they may be honest in telling you that they are safe (and they are mistaken!). They work for the banks that you have trusted for many years, but regrettably, the bank does not wish to take the responsibility for the bad advice and failed investments.

Please help to pass this message to your friends, so that they can avoid making the same mistake.